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Ravi Sir and Sanjeev Sir’s Nimble Education for Commerce and Humanities ICSE,ISC,CBSE,IGCSE

,AS & A,IBDP
Contact 9033311500, 8866611600
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MM : 60 Economics Section 1,2 & 3 Time : 90 min
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Answer ALL THREE question
Question 1
Specialization has resulted in increase in productivity and as well as higher per capita income of the developing
countries like India. However economic problem still persists even after substantial increase in per capita income.
One of the possible reasons could be differential wage rates due to different levels of skills.
(a)What is opportunity cost? [2]
(b)How does specialization lead to fall in average cost? [4]
(c)How does market system play a role in wage determination? What factors lead different wages for workers?[6]
(d)Discuss the effect on supply and demand of goods with increase in per capita income. [8]
Question 2
“The concept of elasticity is very helpful in forming the budget every year.” Said the finance minister of India. It
helps solving the problem of market failure. Proper allocation of resources can be done using this concept.
(a)Define the concept of elasticity. [2]
(b)Explain the two features of ‘Public goods’ [4]
(c)Discuss the consequences of ‘Market Failure’. [6]
(d)Discuss any three ways in which the government finances the public expenditure. [8]

Question 3
No individual consumer or producer can impact the equilibrium point in a perfectly competitive market. However
demand and supply depend on many different factors. Equilibrium is however affected by change in demand
and supply in any market. Elasticity may differ for different products.
(a)Define equilibrium. [2]
(b)How is concept of elasticity helpful to businesses in decision making? [4]
(c)Discuss the non-price factors on which the demand depends. [6]
(d)How is equilibrium achieved in an economy? [8]

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Ravi Sir and Sanjeev Sir’s Nimble Education for Commerce and Humanities ICSE,ISC,CBSE,IGCSE,AS & A,IBDP
Contact 9033311500, 8866611600